Expressed concerns of our five locally owned and operated small business gas stations are valid. Their figures indicate that we already have in place a pump count that would indicate a fully saturated market with stable to declining demand. We also have substantial problems with traffic on Hwy. 99.
The AM/PM brand is owned by BP America, Inc. - subsidiary of BP, which acquired ARCO in 2000. AM/PM mini markets usually attached to ARCO or BP branded gas station. To further draw customers, many have a car wash on site. BP has franchising rights in Northern California.
BP - formerly British Petroleum - headquartered in London, England - and the major player in the Alaska oil fields - North Slope/Prudhoe Bay/Alaska Pipeline - and accounts for roughly 55% percent of Alaskan oil production. Production and distribution interests in 72 countries, #6 in worldwide oil volume. BP is vertically integrated, and controls much, if not all, of its oil production fully through the refining and distribution sectors . Thus it has complete pricing power from well head to pump. That gives it a huge competitive advantage at the retail level when compared to small locally owned fueling outlets. Thinking that we might possibly see initial offering of lower fuel prices to consumers - which could lead to elimination of competition. That in turn makes franchises attractive, and guarantees long term positive cash flow to BP from the various fees it charges owners of the franchises. Could be wrong - but with loss of competition entirely possible that future price increases would occur. It's called buying market share.
At the mini-market level, we see a business plan similar to the WalMart strategy. Large corporations benefit for economies of scale that in turn can allow pricing pressure on suppliers/supply chains. Non fuel products sold at AM/PM could then be priced lower than competing small local businesses.
I firmly believe in free enterprise - and competition among retailers. We already have that. But, that competition has to be fair. BP vs. our locally owned and operated gas stations is not what I consider to be fair. What do you think?